Employer covenant risk remains the second overall most important risk faced by defined benefit pension schemes for the second year in a row with sponsors becoming increasingly concerned about the issue, according to the 2012 UK Pension Risk Behaviour IndexSM (“PRBI”).
The MetLife...
A rise in corporate restructuring due to challenging economic conditions will mean employers and trustees must be more vigilant in managing the employer covenant available to their pension scheme, according to the latest Insight report from Punter Southall Transaction Services (PSTS).
With the...
A rise in corporate restructuring due to challenging economic conditions will mean employers and trustees must be more vigilant in managing the employer covenant available to their pension scheme, according to the latest Insight report from Punter Southall Transaction Services (“PSTS...
The impact of market turmoil on pension funding is likely to intensify the Pensions Regulator’s (TPR) efforts to ensure that regular monitoring of the covenant by trustees takes place, says Mercer. The company is advising trustees to anticipate this move and ensure that the covenant...
Karina Brookes, PricewaterhouseCoopers, on the employer covenant
The latest guidance from the Pensions Regulator (TPR) “Identifying your statutory employer” reminds trustees that this information “should directly inform their assessment of employer covenant”.
Assessing employer covenant comprises several key elements, one of which is...
Monitoring the employer covenant is particularly important during this fragile economic recovery reports Allison Plager
The recent recession has shown that it is not possible to be certain that the economy is always going to flourish. Politicians may rashly promise the end of “boom and bust”, but in reality, given the global nature of finance and business, this is not a promise easily kept. The UK...
The Pensions Regulator (TPR) has published final guidance for trustees to ensure there is adequate security for their pension scheme.
This follows consultation over the summer and provides information on what trustees should do to measure and monitor employer covenant – and any subsequent...
Managing the employer covenant – how to do it every day not just every three years by Navneet Bassan and Karina Brookes, PricewaterhouseCoopers
The Pensions Regulator’s draft guidance asks trustees to monitor the employer covenant (the strength of an employer to support a pension scheme) regularly, not just at the time of an actuarial valuation. Therefore, to reflect best practice, trustees are likely to need to put an evaluation...
Trustees are taking a more pro-active and in-depth approach to reviewing their sponsoring employer’s covenant, according to a Mercer survey.
Employers and trustees are acting in response to advice from the Pensions Regulator. Generally, employers have agreed to stronger technical...
The employer covenant needs regular maintenance to keep it flourishing, says Allison Plager
It is all very well having a final salary pension scheme that is well appreciated by employees and supported by the employer, but it is only as good as the financial position of the company. The promises made by the scheme have to be paid and ultimately the employer is the one who pays them. With...
Next on the DB agenda
Our 2009 defined benefit (DB) campaign resulted in some positive reactions from the pensions market, so a year on we are now shining the spotlight again on the challenges facing DB trustees and sponsoring employers.
In the coming months we will look at the importance...
The Pensions Regulator has had a busy year in terms of guidance, consultations, determinations and the use of its moral hazard powers
The Pensions Regulator (TPR) has issued a record number of documents in the last couple of months, culminating with the annual report and accounts for 2009/10.
Final guidance
Following consultation, the Pensions Regulator has issued final guidance in the following areas:
Internal controls...
